If your small business has a significant amount of debt, bankruptcy can help you reorganize your debts to save your business, wipe out your personal liability for business debts, or simply liquidate the company.
If you own a small business, filing for Chapter 13 bankruptcy may help you reorganize your debts and save your business. Read on to learn more about who can use Chapter 13 bankruptcy and how it can help you.
Bankruptcy can help you whether you wish to continue or shut down your business. However, which type of bankruptcy can benefit you the most depends on your business structure and if you intend to stay in business.
As a small business owner you can file for Chapter 7 or Chapter 13 bankruptcy if your debts become unmanageable. However, which chapter is right for you depends on the structure of your business, how much debt and assets you have, and whether you intend to continue running the business.
For a small business in financial distress, bankruptcy may be the only viable option. There are two restructuring options under bankruptcy law for debtors who want to try to stay in business: Chapter 11 and Chapter 13.
There is nothing in the bankruptcy law that prohibits you from starting a new business after bankruptcy. In fact, you might be able to apply some lessons learned from your prior financial problems to keep you out of trouble in the new business.
While a personal bankruptcy will remain on your credit report for seven to ten years and will make it more difficult to obtain credit, it is possible to get a small business loan after your bankruptcy.